Foreign Nationals

Why Mexican investors want to buy property in the U.S real estate market

By Milo

February 16, 2024 6 min read

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Why Mexican investors want to buy property in the U.S real estate market

The U.S. real estate market has become a beacon for international investors, with Mexican investors playing a significant role in this trend. Accounting for 5% of Latin American property purchases in Miami and standing as the third-largest source of investment in the U.S. residential market with $4.2 billion, Mexican investors are only behind China and Canada in terms of volume. This investment surge is not just about the numbers; it reflects a growing interest driven by the U.S. market's diversity, potential for higher returns, and strategic investment opportunities. Particularly in Miami, where Mexicans are among the top five Latin American investor groups, the trend underscores the U.S. market's appeal, offering lucrative opportunities for Mexican nationals.

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The Mexican vs. U.S. real estate market

Mexican investors find the U.S. real estate market particularly attractive due to its diverse opportunities and potential for higher returns compared to Mexico. While Mexico City's real estate prices average $2,028 per square meter with one-bedroom rents at $1,270, U.S. cities offer a broader investment spectrum. For example, Atlanta's real estate is priced at $2,090 per square meter, with higher rents of $1,813 for a one-bedroom apartment. Similarly, Chicago and Philadelphia present affordable property values with considerable rent potentials, $1,950 and $1,780 per square meter respectively, suggesting higher income from rentals in the U.S.

The U.S. market's appeal extends beyond just numbers; it's about stability and growth. The country's strong legal protections, transparent market data, and historical trend of property value appreciation present a secure environment for investments. These aspects reassure Mexican investors of the safety and potential growth of their investments, making the U.S. an attractive destination for securing higher financial returns and capital gains over time.

Moreover, the U.S. offers tax advantages and efficient investment structures that can maximize returns for foreign investors. Combined with the geographic and cultural closeness, these financial benefits make the U.S. real estate market a lucrative option for Mexicans looking to expand their portfolios and achieve greater returns than what they might find at home.

Where should Mexican investors buy property in the U.S.?

Texas emerges as the preferred destination for Mexican investors, attracting 48% of their investments, followed by California (18%). Despite the allure of states like Florida for other international investors, Mexican preference leans towards closer, more familiar territories, with Texas offering geographical proximity and economic ties that are hard to ignore. However, Palm Beach in Florida has attracted the majority of interested Mexican investors looking for investment opportunities within the state, showcasing a nuanced pattern of investment preferences.

Explore investment opportunities in the U.S. real estate market

Mexican investors have carved a significant niche in the U.S. real estate market, with a clear preference for cities and states that offer economic stability, growth potential, and cultural familiarity. Their investment strategy, focusing on vacation and rental properties in central city and suburban areas, underscores a sophisticated approach to leveraging the U.S. real estate market's diverse opportunities. With a steady increase in investment over the past three years, Mexican nationals are increasingly recognizing the advantages of investing in the U.S., from the potential for higher rental yields to the allure of all-cash purchases. As the U.S. real estate market continues to evolve, Mexican investors are well-positioned to capitalize on its opportunities, reinforcing the cross-border economic and cultural ties that enrich both nations.

The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

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